Report on the Group’s business performance and the economic situation

      Far-reaching geopolitical developments and distortions shaped the economic environment of the voestalpine Group in the business year 2022/23. In particular, Russia’s invasion of Ukraine had an enormous impact on the global economy and the energy markets worldwide.

      The sharp price increases in the energy and raw materials markets, along with the central banks’ easy-money policies in recent years (especially during the COVID-19 pandemic), triggered stubbornly high inflation in both Europe and North America. The central banks in Europe and North America reacted late to the rising inflation, but all the more aggressively: Never before in recent decades have interest rate hikes been imposed in such short order.

      Given the massive increases in interest rates, economists’ forecasts regarding a recession in North America and Europe caused a dramatic dampening of sentiment in these regions during the second half of 2022/23.

      Moreover, the start of the business year 2022/23 was still affected by the COVID-19 pandemic, although both Europe and the United States imposed few or merely moderate restrictions in response to new waves of infection. China, by contrast, stuck to its rigorous containment policy through most of the business year 2022/23 and did not announce a reversal of its zero-COVID approach until the end of the reporting period. This step triggered massive waves of infections, adversely affecting the country’s economy yet further.


      In the business year 2022/23, the impact of the Russian war of aggression against Ukraine was felt throughout Europe. Europe responded to Russia’s aggression by imposing extensive trade restrictions on the Russian economy. The Ukraine war also led to massive increases in the prices of both raw materials and energy. In turn, this caused great uncertainty with regard to economic developments going forward, as the consequences for the European economy were difficult to predict, particularly in the first few months.

      The price increases in the energy markets were one of the main reasons for the substantial increase in inflation at the start of the reporting period. Additional factors included the massive fiscal support packages that European states enacted during the COVID-19 pandemic, as well as the EU’s longstanding low-interest regime. While the European Central Bank (ECB) initially considered the inflationary pressures to be “temporary,” it changed its assessment as time wore on and began to raise interest rates in rapid steps. The initially limited success of these measures aimed at controlling inflation and the unambiguous communications policy of the ECB significantly depressed economic sentiment in the Northern fall of calendar year 2022. According to forecasts, the dramatic economic contraction would be followed by a recession in calendar year 2023. Moreover, the bankruptcy of U.S. banks triggered a massive loss of confidence in Swiss banking giant Credit Suisse, which had to be saved from bankruptcy at short notice by UBS’s acquisition.

      Developments in the real economy were relatively stable until the end of the business year despite the unfavorable economic forecasts in the third business quarter.

      While demand for voestalpine’s products followed a pleasing trajectory on the whole amid this volatile and difficult environment overall, the strong momentum at the start of the business year 2022/23 declined somewhat as time wore on—especially in the consumer goods and construction industries. The automotive industry remained stable despite ongoing difficulties in the global supply chains. The railway infrastructure segment performed very well throughout the business year. Demand in the energy sector for both fossil fuels and solar products was excellent.

      North America/USA

      As in Europe, the waves of COVID-19 infections in North America early in the business year 2022/23 were managed without significant restrictions on the economy. The complete opening of all areas of social life stimulated the economy. Yet high demand and close to full employment triggered a rapid rise in inflation. The U.S. Federal Reserve (Fed) reacted more quickly than its European counterpart and raised the prime rate to tamp down inflation. In turn, however, this slowed the economic momentum and soon dampened economic sentiment. As in Europe, there were fears that the U.S. economy would slip into a recession. In addition, the historic speed and extent of the interest rate hikes increasingly weighed on the capital markets, actually leading to collateral damage in the business year’s last quarter, as feared: California-based Silicon Valley Bank (SVB) was no longer able to absorb the large losses in the value of its bond portfolio and slid into bankruptcy. In order to prevent domino effects in the banking system and a bank run, the U.S. administration had to significantly raise the federal deposit insurance limit over and above the regulatory level. Yet two smaller regional banks also slid into bankruptcy despite these immediate responses.

      At the close of the business year 2022/23, the banking crisis and the dilemma in which the Fed found itself shaped sentiment in the United States. Further interest rate hikes aimed at tamping down inflation run the risk of significantly damaging the economy.

      The voestalpine Group’s North America business developed along an encouraging trajectory in this environment nonetheless. Demand in the railway infrastructure segment and storage technology was highly satisfactory for long periods. The energy segment for its part saw a veritable boom. Not until the end of the reporting period did a certain amount of restraint make itself noticed in a few market segments owing to the developments in the banking sector.

      Brazil/South America

      In contrast to Europe and North America, the economic environment in Brazil has had to contend with high inflation and high interest rates for quite some time. Yet the country’s economy developed along a clearly positive trajectory in the business year 2022/23. Both the domestic economy and exports were strong. Generous support packages and grants were distributed in the run-up to the presidential elections in October of calendar year 2022, stimulating local demand particularly in the first six months of the business year. While the change in government gave rise to some uncertainty, so far it has not brought about a significant economic downturn.

      All of the voestalpine Group’s Brazilian facilities performed well in this environment owing to the boom in Brazil’s solar industry and high international demand for products used in the oil and natural gas industry.


      Economic developments in China during the first three quarters of the business year 2022/23 were adversely affected by the country’s strict zero COVID policy. Economic activity ground to a complete halt in some of the country’s regions. This triggered significantly slower growth in China itself and global supply chain disruptions that gave rise to enormous challenges in Europe and North America in particular. Ongoing problems in the real estate sector further dampened China’s economy.

      The country’s central government did not implement a 180-degree reversal—entailing the immediate abandonment of all COVID-19 pandemic control measures—until toward the end of the third business quarter. The sudden opening of social life in the last quarter of 2022/23 triggered a massive wave of COVID-19 infections, piling yet more pressure on the economy. The economy therefore did not begin to gather momentum until after the Chinese New Year celebrations in late January/early February of calendar year 2023.

      These developments affected the voestalpine Group’s Chinese facilities in varying intensity. For example, the production of automotive components continued largely undisturbed at a solid level throughout the reporting period. Projects in the rail technology sector, however, were interrupted from time to time, and the tool steel segment was repeatedly impaired by lockdowns. Demand began to rebound in all key market segments toward the end of the business year 2022/23.

      Takeover or purchase of companies or of interests in companies.